Bank of America Corp. is said to be offering 1.06 billion euros ($1.38 billion) of bonds backed by a loan used to buy German apartment buildings, in the first public deal of its kind in Europe this year.

The commercial mortgage-backed bond transaction is backed by a debt raised by WOBA Dresden GmbH, a unit of Gagfah SA, according to a person familiar with the plan, who declined to be identified before the transaction is completed. Gagfah is owned by New York-based private-equity and hedge-fund manager Fortress Investment Group LLC.

It’s the first European CMBS publicly marketed since Deutsche Bank AG priced 754 million euros of bonds in September, JPMorgan Chase & Co. data show, and was the only transaction of its kind in 2012, according to Fitch Ratings. The extra yield investors in the region demand to hold securities backed by commercial mortgages dropped to 275 basis points over benchmarks from a record 1,000 basis points in 2009.

“Refinancing risk still exists, but the pressure on German multifamily housing is less intense than in many other asset classes, including most European CMBS, where little bank funding is available,” Fitch wrote in a report on Feb. 22.

The Bank of America transaction, to be known as Taurus 2013 (GMF 1) PLC and is made of six portions, with four to be publicly offered, said the person familiar with the deal. Officials at Bank of America didn’t return calls seeking comment.

Taurus is the securitization of a loan that Gagfah, the third-biggest owner of German real estate by market value, received from Bank of America to pay back 1.04 billion euros of debt maturing in May. That loan was originally used to buy 38,000 apartments in 2006, held by Gagfah’s Woba unit in Dresden.

Fortress is among the private-equity firms facing debt deadlines after buying German real estate with the cheap credit available in the years before the global financial crisis. The firm owns 66% of Gagfah, according to data compiled by Bloomberg.